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SMEs Dominate Africa’s Business Landscape- PAFTRAC Report

A new Pan-African Private Sector Trade and Investment Committee (PAFTRAC) report has revealed significant insights into the structure, scale, and trade orientation of businesses across the continent, underscoring the pivotal role of small and medium-sized enterprises (SMEs) in driving Africa’s economic integration.

The findings are based on responses collected from a diverse range of businesses across Africa and beyond, shedding light on patterns of trade, company sizes, and sectoral representation.

According to the survey, the highest number of responses came from Egypt (11.61%), followed by Ethiopia (9.69%) and Nigeria (7.68%), reflecting the strong engagement of North and East African economies.

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Algeria and Tunisia each accounted for 4.43%, while Senegal contributed 4.25% and Kenya 4.16%. Other countries with notable participation included Ghana, Morocco, Mozambique, Côte d’Ivoire, Angola, Cameroon, and the Democratic Republic of Congo, all with response rates above 3%.

The survey also recorded inputs from several non-African countries, including the United Kingdom, Germany, Qatar, France, the Philippines, Saudi Arabia, the United States, Bahrain, and Jordan, reflecting growing international interest in Africa’s trade and investment landscape.

Respondents represented a wide spectrum of economic sectors, with the leading categories being:

  • Banking & Financial Services
  • Agriculture & Agribusiness
  • Tech & Telecom
  • Transport, Logistics, Supply Chain and Storage
  • Manufacturing (including Automotive)
  • Mining and Natural Resources
  • Pharmaceuticals

Interestingly, the largest category was ‘Other’, encompassing Education & Research, Government & Public Sector, Arts & Culture, Legal Services, and Construction & Engineering, indicating that participation extended well beyond traditional trade and industry sectors.

The report shows that respondents reflected both ends of the business maturity spectrum.

  • 39.75% of companies have been in operation for over 10 years,
  • 31.56% for 2–5 years, and
  • 13.98% are new or start-ups.

When it comes to size, the majority (45.87%) were small businesses with 1–10 employees and annual revenues below $1 million. This aligns with World Bank data, which estimates that SMEs make up about 90% of all African businesses and employ around 80% of the continent’s workforce.

The next largest group (22.46%) consisted of large companies with 500+ employees. Only 8.48% of respondents worked for companies generating over $1 billion annually, while 8.65% reported annual revenues between $101 million and $1 billion.

This suggests that smaller enterprises stand to gain the most from participating in PAFTRAC’s survey and related trade initiatives.

The survey found that 49.62% of respondents do not currently export goods or services. However, 39.99% is exported within Africa, with the remainder trading with regions such as Europe, North America, Asia, and the Gulf States.

Among intra-African exporters, all 54 countries were cited as trade destinations. The top 10 recipient countries were:

  1. South Africa – 22.51%
  2. Kenya – 20.39%
  3. Egypt – 18.73%
  4. Nigeria – 17.98%
  5. Algeria – 17.07%

The import patterns mirrored export trends, dominated by Africa’s largest economies, which engage heavily in regional trade.

The PAFTRAC survey provides clear evidence that Africa’s private sector is broad, dynamic, and SME-driven. With most businesses operating at smaller scales, policy interventions, trade facilitation measures, and investment support tailored to SMEs will be critical in unlocking the full potential of the African Continental Free Trade Area (AfCFTA).

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